There is an art to negotiating literally anything. Often, it’s said that you’re either born a good negotiator, or you’re not… but this isn’t true.
It is true that some people take to negotiating more than others, but anyone can learn how to successfully navigate a conversation, and settle on a good deal. In this case, we’re talking about how to negotiate a great deal when looking for a Sydney office lease.
First, we’ll touch on the traits and behaviours that make a good negotiator. Then, we’ll discuss applying these learnable actions to your office lease negotiations. We’ll also delve into the important parts of the office lease, and how to gain leverage as a tenant.
At the end of the article, we’ll also talk about why it is never a bad idea to hire a commercial tenant advisor to negotiate on your behalf.
How to be a good negotiator
There are a number of factors that make a good negotiator. It’s these learnable skills that can truly make all the difference between a fantastic office lease deal, and one that leaves your business exposed.
Know what you want to get out of the negotiations
First of all, a good negotiator always goes into a discussion knowing exactly what they want to get out of it. In the case of a new office lease, that is likely to be a certain rental amount, along with the length of the lease, or a clear makegood clause.
Aim for a fair result
It’s important to understand that there doesn’t have to be a winner and a loser in a negotiation. In fact, the best result is when both parties walk away from the negotiation feeling as though they have benefited. This then encourages better relations going forward, which is obviously important when it comes to a tenant/landlord relationship.
Be polite and professional at every turn
Manners cost nothing, but in a negotiation, they could spell the difference between success and disaster. Being rude or aggressive is going to sour relations fast, and absolutely kill your chances of a good deal. If the other party is being difficult, you’ll also feel as though you don’t want to deal with them… so don’t!
Know your stuff!
Research before negotiating is so important. You must understand the particulars of the deal, as well as any bits and pieces of information that could help your position. You’ll immediately lose leverage if it turns out that you don’t fully understand an aspect of the deal, and the other party realises this.
Negotiating a commercial lease
Now that we’ve covered some of the more important aspects of negotiating, let’s take a closer look at the things you must consider when negotiating a new lease for your office.
Know what you’re looking for
Before you even begin to hunt for a new office space, you must know what you’re looking for. That’ll ensure you don’t end up with an office that isn’t suitable for your business, just because you got a ‘good deal’.
One of the most important considerations is space. You’ll need an office that allows for enough space for your workforce, or those who do work from the office. You also need to ensure that you have adequate rooms and areas, for any particular working needs specific to your business.
This is why, at Niche Projects, we offer a free office space calculator. Anyone can take advantage of this tool to pinpoint how much office space they need, including how many rooms, workstations, and much more. When you do use a tool like this, you’ll know exactly how much space you need, and what to look for in a new Sydney office space.
Then, you’ll truly know whether the space is worth negotiating for!
Understand the lease
Once you enquire about space, you’ll be able to determine more about the lease terms. Oftentimes, agents might allow you to present your own (reasonable) offer of lease length. However, this can vary from property to property. The important thing here is to fully understand the terms that are being presented, and where there might be wiggle room.
A thorough understanding of the lease itself is essential before beginning negotiations. Here, you can also employ the help of a tenant advisor or legal counsel, to ensure you fully grasp each clause in the lease. Once you do, you’ll be able to begin negotiating.
Rental amount
Most negotiations are centred around the amount of rent that will be paid by the tenant. You might know by now that office space in Sydney doesn’t exactly come cheap. This is exactly why negotiations are so important, to ensure that you are getting the best deal possible. Paying more than you should be could hurt your business in the long run. Alternatively, a very reasonable rental agreement means more money in the coffers for business costs, and further investment.
Length of lease
The length of a commercial lease is quite flexible, and discussing this will likely be a key aspect your negotiations. Generally, a commercial lease runs for about 3 to 5 years. However, you may be looking for a shorter or longer agreement. This can be proposed to the agent or landlord, but you should be prepared to negotiate the rental amount, including the yearly increase.
If you’re more inclined to rent the space longer than 5 years, it’s likely you’ll be able to negotiate a lower price. Alternatively, if you’re aiming for a shorter lease of about 2 years, you should expect to pay a little more for the benefit of a shorter lease.
Makegood clause
This is one clause that causes a lot of problems for businesses all over Sydney, and it is essential that you fully understand the clause before you sign any documents. The makegood clause refers to the requirement to return the office to its original condition when you vacate. Often, this clause is vague… and when it comes time to vacate, many businesses are caught out and must pay an additional fee to their landlord.
You simply must negotiate your makegood clause if it is not clear-cut. You and your landlord or agent can nut out the details and ensure that when you do eventually vacate the space, you won’t be getting any nasty surprises.
Hire professional help
At Niche Advisory, getting the best deal on office leases is exactly what we do. We’re expert negotiators, and we utilise a wealth of knowledge and experience to ensure that our clients always end up with an excellent deal. If you need expert advice or someone to negotiate your office lease, get in touch with Niche Advisory today.